House votes to keep gas price regulations
Politics • Opponents argue it’s a rejection of free market, but supporters say it is needed to ban predatory pricing.
Published: March 1, 2012 08:22AM
Updated: February 29, 2012 09:46PM

House lawmakers voted Wednesday to keep an act in place that prohibits fuel companies from lowering gas prices below cost in an attempt to drive small filling stations out of business by large petroleum retailers.

The measure, HB325, looked like it was dead Tuesday after the House narrowly voted to let the Motor Fuel Marketing Act expire this year. But the bill’s sponsor, Rep. Don Ipson, R-St. George, rallied enough support to get it reconsidered and, eventually passed 41-31.

“I think there was some misunderstanding [of the bill],” Ipson said.

He said by preserving the law another five years, it would protect small “mom and pop” gas stations from falling victim to predatory pricing by larger oil companies or big box stores that could undercut them for a sustained period of time until they went out of business.

But the narrow vote brought out some anger among fellow Republicans who believed it was government interfering with the free market.

“So when we go down this rat hole, I wonder — have we taken leave of our values?” Rep. David Butterfield, R-Logan, asked. “What happened to ‘free markets work best when government lets free markets work?’ What happened to that notion?”

The average price of gas in Utah is $3.28 a gallon while the national average for 85 octane is $3.19 a gallon. There are predictions gas prices could reach $4 a gallon.

The lawmakers also rejected a proposal that would allow them to review the act every year.

Rep. Steve Eliason, R-Sandy, said he used to work in the oil and gas industry and argued the act needs to be in place because it benefits the consumer in the long run.

He said if large companies engage in predatory pricing and drive small businesses out, it leads to less competition and, ultimately, higher prices.

“I firmly believe the market works best by itself,” he said. “But in some cases, there needs to be government intervention to make it work as best as possible.”

The measure now moves to the Senate.

dmontero@sltrib.com

Twitter: @davemontero